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US Republicans uneasy over French Socialist win

Republican US lawmakers gave a cautious reaction Tuesday to Socialist Francois Hollande's presidential win in France, with one senator warning the result could mark an "unnerving" setback in Afghanistan.

“If the result of the election is that the French are going to withdraw from Afghanistan by the end of the year, that’s unnerving because we’re well on our way to getting Afghanistan right,” Senator Lindsey Graham told AFP.

Hollande was elected president on Sunday, ousting incumbent Nicolas Sarkozy after pledging to pull French troops out of Afghanistan by the end of this year, ahead of an agreed NATO timetable.

Hollande has also vowed to renegotiate an EU fiscal pact, but Graham stressed that excessive taxation and spending would only worsen Europe’s fiscal crisis, not improve it.

“If the result of the French election is you don’t need to reform entitlement, good luck to Europe, because the euro is going to fail if somebody doesn’t step up to the plate and bring some economic balance,” Graham added.

“Germany and other European nations are not going to subsidize the euro with that kind of attitude,” he said, and Americans would be wrong to “take the message from the French government that we should be growing government and taxing more.”

Senior Senator John McCain described Hollande’s win as “a rejection of the austerity policies” which could lead France into “direct tensions” with Germany.

McCain, the top Republican on the Senate Armed Services Committee who lost the 2008 White House race to now-President Barack Obama, also expressed concern that France might pull its troops from Afghanistan.

“What I worry about is our military-to-military relations,” he said.

“We’ve worked very closely with the French in a number of areas, and we want to try to reaffirm that. I’m not sure you’ll get that out of this president.”

But McCain insisted that “we respect the view and verdict of the French people,” noting that many voters in France were displeased with Sarkozy’s governing style.

“We look forward to working with Mr Hollande and I hope we will continue our close military relationship.”  

Republican senator John Boozman, who chairs the bipartisan “French caucus” in Congress that deals with issues of mutual concern, also gave a cautious reception to Hollande.

“We’re just kind of watching how it develops,” he said. “But we’re looking forward to continued dialogue.”  

Obama called Hollande hours after his win and invited him to the White House next week ahead of the NATO and G8 summits in the United States.

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Trump orders investigation into France’s planned tax on tech giants

US President Donald Trump has ordered an investigation into France's planned tax on internet services that will hit American tech giants especially hard, officials said Wednesday.

Trump orders investigation into France's planned tax on tech giants
Photo: AFP
The investigation into unfair trade practices could pave the way for Washington to impose punitive tariffs, something Trump has done repeatedly since taking office.
“The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies,” US Trade Representative Robert Lighthizer said in a statement.
The proposed three percent tax on total annual revenues of companies providing services to French consumers only applies to the largest tech companies, “where US firms are global leaders,” the trade representative's office said.

France to introduce tax on big US tech firms in JanuaryPhoto: AFP

The so-called Section 301 investigation is the primary tool the Trump administration has used in the trade war with China to justify tariffs against what the United States says are unfair trade practices.   

USTR will hold hearings to allow for public comment on the issue over several weeks before issuing a final report with a recommendation on what actions to take.
Despite the objections to the French tax proposal however, the statement said the United States will continue to work with other advanced economies to address the conundrum of how to tax tech companies.
The Group of 20 has tasked the Organization for Economic Cooperation and Development with finding a fix in the international tax system that has allowed some internet heavyweights to take advantage of low-tax jurisdictions in places like Ireland and pay next to nothing in other countries where they make huge profits.
The Computer & Communications Industry Association on Wednesday applauded the US Trade Representative's move, saying the tax would retroactively require US internet giants operating in France to turn over a percentage of their revenues from the beginning of this year and violates international trade commitments.
“This is a critical step toward preventing protectionist taxes on global trade,” CCIA official Matt Schruers said in a statement.
“CCIA encourages France to lead the effort toward more ambitious global tax reform, instead of the discriminatory national tax measures that harm global trade.”